The Fair Work Commission has delivered a landmark decision that will significantly impact junior wage rates across three major industries, with changes set to begin in December 2026.
On 31 March 2026, a Full Bench of the Fair Work Commission handed down its decision in response to an application by the Shop, Distributive and Allied Employees’ Association. The decision affects junior employees under the General Retail Industry Award 2020, Fast Food Industry Award 2020 and Pharmacy Industry Award 2020.
The key change is that junior employees aged 18 and over who have been employed by their current employer for more than six months will eventually receive the full adult minimum wage rate. This represents a significant departure from the current system, where these employees receive between 70% and 90% of the adult rate depending on their age.
The changes will apply to employees in general retail, fast food and community pharmacy industries. However, the decision creates different outcomes for different age groups:
- employees aged under 18 will see no changes to their current rates;
- employees aged 18–20 with less than six months’ experience with their current employer will continue to receive their current percentage rates; and
- employees aged 18–20 with more than six months’ experience will gradually move to full adult rates through a phased implementation.
The provisional implementation schedule begins 1 December 2026, phasing the changes in across two and a half years:
- 18-year-olds will move from 70% to full adult rates by July 2029;
- 19-year-olds will reach full adult rates by July 2028; and
- 20-year-olds will achieve full adult rates by July 2027.
The rates will increase incrementally every six months during this transition period.
The Commission considered extensive evidence from 87 witnesses, including witnesses who shared their workplace experiences and expert economists who analysed potential impacts. The Commission found that for adult junior employees, the variation was justified for work value reasons, considering the nature of work, skills, responsibility and working conditions.
Fairness to junior employees weighed heavily in the decision. The Commission took into account factors such as the value of junior employees’ work and young people’s labour market disadvantage. However, it also considered fairness to employers and likely business impacts.
Importantly, the Commission maintained current rates for employees under 18, recognising factors such as employment restrictions, availability constraints, and differences in maturity and work experience.
This decision will have significant cost implications for businesses in the affected industries. The phased implementation provides time to adjust business models and budgets, but employers should begin planning now for the increased wage costs.
The Commission will issue further directions soon, providing additional opportunities for parties to be heard regarding the implementation details.
Next steps
If your business employs junior staff in retail, fast food or pharmacy industries, this decision will likely affect your wage costs and workforce planning. The complexity of the new age- and experience-based criteria means careful attention to payroll systems and employee records will be essential. Given the significant financial implications and implementation complexities, consider seeking our advice to understand how these changes will specifically impact your business and ensure your compliance with the new requirements.
